By Tom Nadeau
Special to the Daily Journal
SACRAMENTO - This story ought to be told over a couple of drinks down at the Bada Bing Club, the sleazy mob social club for TV's Tony Soprano, with cigar smoke and dancers in the background for atmosphere.
Instead, this colorful courtroom drama of alleged arson, Mafia dons, second-story men, cruise ship swindles, money laundering, bingo fraud and little old ladies buying invisible dump trucks is unfolding in Sacramento County Superior Court.
Private investigator Charles L. O'Neal, 59, is on trial for allegedly soliciting an undercover cop to steal computer records from the home of Thomas Ivers, a Fair Oaks man suing Allstate Insurance for bad faith dealings. The jury may get the case today. tues.
In jeopardy are the good names of O'Neal and perhaps even the Allstate defense attorney he worked for, Richard J. Edson of Sacramento's Edson LaPlante & Spinelli. Legal maneuverings in the trial have been extensive, judging by the many continuances that O'Neal's defense attorney, Michael Bradley Wishek, has wangled.
O'Neal was arrested July 27, 1999, after leaving a secretly taped meeting with the undercover agent. He made 14 court appearances before being held to answer in Superior Court, and 16 before the trial started March 19. While important to O'Neal, civil attorneys monitoring his trial view it as merely a curtain-raiser to the mammoth Ivers v. Allstate civil trial, set to go June 30 in El Dorado County Superior Court. O'Neal faces two charges: soliciting the commission of a crime and soliciting to receive stolen property.
"Evidence will show this case could have occurred in someplace like Chicago with the Mafia or in the New York area where there is a mob or a gang," Sacramento County Deputy District Attorney Christopher Ore told the jury. "You will be amazed that it occurred in Sacramento." To derail Ivers' suit against Allstate, O'Neal allegedly sought out "underworld characters" and "second-story men," "a Mafia person" who could get the job done, whatever it might be, Ore said. Defense attorney Wishek, from Sacramento's Rothschild Wishek & Sands, said O'Neal never asked anyone to burglarize Ivers' home. Besides, even if he did, the request did not meet the legal definition of solicitation for this kind of crime, countered Wishek. Indeed, he said, O'Neal was entrapped by a poorly trained sting team.
Each day, insurance lawyers, Allstate executives, adjusters and O'Neal supporters have quietly watched the show as it plays out before retired Superior Court Judge John J. Gallagher. Sharpening the suspense is the possibility that the verdict may swing on how the jurors interpret a single garbled word at the end of a crucial taped conversation between an undercover officer and the defendant. The last few recorded words O'Neal spoke to former Sacramento County Sheriff's Department Capt. Ernest Buda, posing as a would-be conspirator, included a phrase that might either be heard as "illegal" or "they'll link up." The jurors' decision about which it is could make the case.
The case began on Jan. 14, 1997, when Ivers' 5,200-square-foot home in Shingle Springs burned to the ground. Goats roaming through an open door into a basement billiards room had accidentally knocked over a kerosene heater, Ivers said in an insurance claim he filed for $1.2 million.
Allstate rejected the claim, saying a state fire marshal and a company investigator had mutually determined the cause was arson. They said a specially trained dog had nosed out other places in the structure where kerosene had been poured.
Not one to take no for an answer, Ivers filed a bad faith lawsuit against Allstate in El Dorado County in 1998, using Glenn W. Peterson of the Sacramento branch of McDonough Holland & Allen as his counsel.
Allstate hired Edson to defend the case. Edson hired O'Neal to collect information to see if they could discredit Ivers and possibly force him to drop the suit. Edson testified that Ivers, a 61-year-old financial consultant, had prior felony convictions for conspiracy to distribute cocaine, arson and being a felon in possession of firearms. Edson also claimed the Washington State Gambling Commission had investigated Ivers for bingo fraud and that the gaming detective in the case reported being afraid to approach Ivers without a bodyguard and .357 Magnum.
Ivers also had victimized vulnerable women, Edson alleged, one of them an elderly relative of comedian Foster Brooks whom Ivers met on a cruise ship. After convincing her to let him run her financial affairs, Ivers then undertook some odd deals involving the purchase of nonexistent dump trucks, Edson testified. "He's a total sociopath," Edson claimed.
Ivers confirmed in an interview that he was convicted of conspiracy to distribute cocaine 15 years ago. "The rest is b------t," he said emphatically. "I've had people disbarred before. You can check on it. Edson will pay for this," Ivers vowed. As Ivers' bad-faith suit moved along in El Dorado County, a chance comment by Ivers' counsel Peterson to Edson alarmed the Allstate attorney, he testified. Ivers seemed unusually well informed about Allstate's business. He always seemed to be "leading the race" in information, Peterson told Edson over coffee at a Placerville cafe. "It's as if he was sitting right there in your office," Peterson said. "A prudent lawyer in your position should have his office swept for bugs."
In testimony, Peterson confirmed making statements to Edson to this effect. Peterson later withdrew as counsel for Ivers. Ivers is now represented by Glenn S. Guenard of Sacramento's Laskin & Guenard.
The next day, O'Neal checked Edson's office out. No bugs were found, but Edson remained suspicious. Meanwhile, a copy of Ivers' credit report allegedly ended up in the hands of O'Neal. Once again, Ivers found out and, in the third case emerging from this dispute, sued both O'Neal and Edson charging the report had been obtained illegally.
Edson was named personally in both the bad faith and credit report suits. His name was dropped from both after confidential settlements were reached. The credit report suit against O'Neal remains pending in Sacramento SuperiorCourt.
Then the plot thickened once again. The private eye met with a reputed Mafia don, who then passed on his suspicions about the private eye to Ivers, who contacted the police, who decided to set up an undercover operation to see if the private eye was doing anything illegal.
At some point in his investigation, O'Neal learned about Virgil "The Don" Tonelli, also supposedly known to his Sacramento friends as "The Godfather," according to testimony and records. Tonelli and Ivers had past dealings, and O'Neal allegedly thought Tonelli might provide information against Ivers. But unbeknownst to O'Neal, Tonelli and Ivers apparently remained friends. Tall, fit, dark-haired and dapper, O'Neal arrived at Tonelli's home about 1 p.m. July 22, 1999.
According to a transcript of the tapes, O'Neal first flattered Tonelli and suggested that a former detective O'Neal knew "was always sure you were up to more than he was ever able to figure out." This brought some good-natured laughter from Tonelli. "I think everybody thinks," he said, "I'm tied up ... with the mob." That assumption was incorrect, Tonelli explained, coming only from his Italian name and the kidding he takes about it. But in the course of their conversation, Tonelli dropped a bomb. "I understand that somebody from the Roseville office of Allstate ... is giving Ivers a lot of inside ... information, and he's got uh, files of ...claims ... Allstate is through with," Tonelli said on the tape. The best way to find out what Ivers had on Allstate and O'Neal and who was feeding it to him was to get into his house and his computer, the two figured.
Based on Tonelli's earlier description of the situation, Sacramento County Sheriff's Detective Steve Bray had already drafted retired sheriff's Captain Ernest "Bernie" Buda to play "Sal," a "hit man from San Jose." "Sal can get this stuff," Tonelli told O'Neal, offering to put the two together that same day.
"You'll enjoy talkin' to him. [He can do] anything you want. [Laughter] He -
he's, uh, he's not [small time]." O'Neal's parting words to Tonelli were, "While I have my own personal opinions of what I'd like to see happen ...[laughter] ...my problem is that I represent a company that could get hit for hundreds of millions of dollars if they got in involved in this."
"Yeah," Tonelli said.
"Like Allstate Insurance," O'Neal replied.
O'Neal met "Sal" that day at a restaurant parking lot. They walked around the lot, à la John Gotti, trying to avoid law enforcement microphones. But Buda, a burly, graying man with a flowing beard and ponytail, was wired to the hilt.
Ivers was a money launderer and arsonist and one miserable dude, O'Neal told Buda. "In the 30 years I've been doin' this, I've run into a lot of colorful people, questionable people," O'Neal told "Sal." [But] this guy is probably the worst I've ever seen." "What I'm interested in," O'Neal said, "is suckin' the wind out of his sails." "Sal" was succinct: "We're both lookin' at ... paydays." O'Neal detoured into procedural talk. "... They do this all the time," O'Neal said. "We don't want you to do anything illegal, but we want you to know you have carte blanche budget."
"Sal" simplified it. He would break into the house, get the records and computer and hand all of it over to O'Neal or the client. O'Neal backed off. "My guess is that's not probably ... the dance they want to do," O'Neal said. More likely, the client would want the information without receiving anything to show they had. "This is not going to be documented. It's not gonna be put in a letter. It's gonna be in a series of phone calls," O'Neal said, describing how the final authorization would be given. "Sal" wanted $10,000 to $12,000 for the job, but the final arrangement was $6,000 for getting everything off the database in Ivers' home computer and a $5,000 bonus if the information was especially useful, the tapes indicate. "I don't want no fingerprints" O'Neal reminded "Sal," according to the prosecution.
O'Neal and Buda met again on July 27, 1999 to finalize the deal. As their meeting ended, they exchanged friendly so-longs, included three sentences and one garbled word. "I don't want anybody doing anything [illegal] (or) [they'll link up]," he is heard to say on the tape. "I'll pay for information. It's that simple," O'Neal said in parting. The original transcription typist had rendered it as "illegal," which would more or less confound the prosecution's allegations regarding O'Neal's intentions.
Bray did not correct it when he first reviewed it, and, when confronted by Wishek with it, Bray said it appeared to be in error. What O'Neal really said, Bray insisted, was "they'll link up," meaning Allstate's legal opponents. Meanwhile, Ivers seems to be keenly awaiting his bad-faith suit against the insurer this summer.
In one of the surveillance tapes, O'Neal refers to Ivers as a man with "an obsession." And certainly, his campaign against the insurer bears many of the trappings of a crusade. All of Ivers' mailing envelopes are emblazoned with a ban-Allstate symbol over the slogan, "ERADICATE ITS EVIL PRESENCE." He bought several newspaper advertisements seeking policyholders who felt wronged by Allstate.
He also claims to have spent tens of thousands of his own dollars investigating Allstate and aiding a law enforcement task force looking into alleged corrupt insurance practices by the company. Ivers certainly inspired a circle-the-wagons mood attitude among Allstate,
Edson and O'Neal. Detectives may have clandestinely captured it on tape. "Everyone wants this suit to go away and it's not going to go away until we catch [Ivers] doing something he shouldn't be doing...," O'Neal said on the tape. "Of course, we don't want him catching us doing something we shouldn't be doing, either."